EMV Chip Card Information for Merchants
Issuance of EMV
In October 2015 card providers started issuing EMV debit and credit chip cards. These cards have a built-in computer chip that provides cardholders and merchants an added layer of security against point-of-sale fraud.
The embedded chip allows a transaction to be processed in a safer way by issuing a unique, one-time code each time it is used. This action should mitigate counterfeit and card-present fraud that costs businesses and financial institutions billions of dollars each year.
For this heightened security to work for your business, you should consider a chip-enabled terminal that interacts with a cardholder's chip card to send the encrypted data across the payment network for verification and authorization.
Are merchants required to switch to chip-enabled terminals?
No, although it’s not a requirement it could be costly if you don’t. Effective October 2015, you could be held liable for the costs of a fraudulent transaction if the person paying at your terminal has a chip card but has to swipe the magnetic stripe on the back of the card to complete their transaction.
Here's how the chip card point-of-sale process works
The magnetic stripe hasn't gone away
Chip cards will continue to have a magnetic stripe on the back, which means they will continue to work in a 'swipe' terminal, but the payments industry is strongly encouraging merchants to switch to chip-enabled terminals.
Purchases online and by phone haven't changed
While chip cards and chip-enabled terminals combine to fight point-of-sale fraud, they don't change the online or over-the-phone payment process. Consumers will provide card information as they have done in the past.